Better Place Says UK Not Giving Electric Cars a (Tax) Break

Is the UK’s Tax Man still short-sighted in giving incentives for electric cars?

The British government is not doing enough to give consumers enough incentives to purchase electric cars, says Better Place LLC CEO Shai Agassi in an interview with the UK newspaper The Guardian. The interview quotes Agassi as saying that other countries including China, Denmark, France, Japan, Israel, and the USA are giving incentives and tax deductions ranging from 5,000 Euro in France to zero car taxation in Denmark for persons willing to purchase electric cars over those burning fossil fuels.

Although the British government did pass legislation to give tax incentives of up to 5,000 Pounds on the purchase on an electric car, Agassi claims that these British purchase incentives are “too small and too short term to make investing in an electric car worthwhile.” The British tax incentives are only to be in effect through the year 2012, with the majority of the government’s budget for this purpose set up to only last through the first half of that year, according to the aforesaid news sources.

“One thing that’s missing in the UK is clarity of government regulations. When we come in and do a project like [Better Place], it’s a fairly intensive infrastructure project with a lot of investment. Investors want to see clarity on the regulatory framework that would indicate that the government would support this for a long period of time, not just for a small number of cars or a short period of time.”

The Guardian did note that the British government hopes to see as many as 1.7 million electric cars on the roads by 2020 to meet the country’s carbon reduction requirements. At present, there does not appear to be a leading automotive electric car promotion campaign in progress in UK, although electric cars manufactured by France’s Renault –Nissan partnership appears to be one of most promising with its Nissan Leaf model.

Denmark, which is currently testing the Better Place battery exchange network, plans to eventually tax gasoline driven cars by as much as 180 percent while levying no purchase tax on electric models. Better Place is now planning to launch its first public trials in Israel later this year and is also building networks of switch stations in Denmark, Australia and Hawaii. In regards governmental roles in launching electric cars, Agassi told the Guardian:

“The purpose of incentives and taxes is to pull the levers so the consumer makes rational decisions for the global economy.”